With his facility facing at least a $70-million shortfall this year amid the nosedive in air traffic during the pandemic, the CEO of the Ottawa International Airport Authority is calling for millions of dollars in federal and provincial aid to help finance the terminal’s planned LRT station and pay for rapid COVID-19 testing.
In a recent interview with OBJ, Mark Laroche said that just one million passengers are expected to pass through the Ottawa terminal in 2021, down from 1.4 million in 2020 and 5.1 million two years ago.
A non-profit organization, the airport authority generates virtually all of its revenues from landing fees charged to airlines, terminal and airport improvement fees levied on passengers as well as concessions and parking.
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The more passenger volumes plummet, the more it jeopardizes the airport’s ability to fund projects such as the light-rail station for the expanded Trillium Line, Laroche said. To rein in costs, the airport has paused all capital projects not related to safety and security.
The LRT extension is scheduled to be completed in the second half of next year. The latest cost estimates now peg the price of constructing the station at between $15 million and $17 million – money the airport authority simply doesn’t have, Laroche says.
“This is a project that has to start now if we want to finish at the same time as the LRT,” Laroche said. “There’s a real urgent need for that.”
The airport racked up a deficit of more than $50 million in 2020 and is on pace to far exceed that shortfall this year as the number of daily flights in and out of YOW has dwindled to about a dozen, down from around 110 before the pandemic.
Fee hikes ‘the last thing we want to do’
The airport has to borrow money to make up the difference, and Laroche said the only way to pay those debts is through hiking fees or landing government support.
With the industry already staring at a long road back to pre-COVID passenger levels, he said piling additional costs on travellers is not an option.
“That’s the last thing we want to do,” he said of fee hikes. “If we want to keep the cost of flying manageable in our country, we’re going to need (government) help.”
Laroche said he asked the feds last summer for $13.5 million to finance the LRT station, putting the request through Ottawa South Liberal MP David McGuinty, whose riding includes the airport.
McGuinty told OBJ he is confident the funding will be delivered, adding the matter is before Transport Canada.
“I continue to remain hopeful that (Transport Canada) is giving this its fullest consideration,” he said.
In an email to OBJ, Transport Canada spokesperson Cybelle Morin said the government has pledged $500 million over six years to help finance “critical investments” in transit infrastructure, safety and security at large airports across Canada.
“Projects such as the Trillium Line LRT station at the Ottawa airport may apply for this funding,” she said, adding more details on the program will be coming this spring.
On Friday, spokesperson Krista Kealey said the airport authority plans to put in an application.
“Our understanding is that our project meets the eligibility criteria,” she said in an email.
“This is almost Ouija board forecasting. No one knows how it’s going to go.”
The federal government’s relief package also includes a plan to waive rent at medium-sized airports across Canada until the end of 2024.
Laroche urged the Trudeau government to extend the moratorium to at least 2025 and perhaps longer, saying he doesn’t expect the airport to return to pre-COVID passenger levels for at least five to seven years.
“This is almost Ouija board forecasting,” he added. “No one knows how it’s going to go.”
In addition, Laroche wants the federal and provincial governments to pay for rapid COVID-19 testing technology at the airport.
“Testing is part of the solution,” he said. “We’ve been saying that from the beginning.”
Meanwhile, construction on Group Germain’s $40-million Alt airport hotel project, which was originally slated to be completed this spring, has yet to begin. The company hoped to break ground on the hotel last spring, but the pandemic put a halt to all the firm’s development activities.
Vice-president of operations Hugo Germain told OBJ the company will resume the project “once the situation is stabilized and our industry is back on its feet.”
Laroche said he hopes that’s sooner rather than later.
“We can’t keep that opportunity open for years,” he said. “At some point, we have to agree to a start date.”